Community Health lowers revolver to $385 million, edits covenant

By Wendy Van Sickle

Columbus, Ohio, Feb. 20 – Community Health Systems, Inc. and wholly owned subsidiary CHS/Community Health Systems, Inc. amended their credit agreement on Feb. 15 to change the first-lien net debt to EBITDA ratio financial covenant and to reduce the extended revolving credit commitments to $385 million, according to an 8-K filing with the Securities and Exchange Commission.

The amended financial covenant provides for a maximum first-lien net debt to EBITDA ratio of 5x from July 1, 2018 through Dec. 31, 2018; 5.25x from Jan. 1, 2019 through Dec. 31, 2019; 5x from Jan. 1, 2020 through June 30, 2020; 4.5x from July 1, 2020 through Sept. 30, 2020; and 4.25x thereafter.

In addition, CHS/Community Health agreed to further restrict its ability to make restricted payments.

The revolving commitments will terminate on Jan. 27, 2021, subject to a 91-day springing maturity date applicable if more than $250 million of CHS/Community Health’s 8% senior notes due 2019, 7 1/8% senior notes due 2020 or term H loans due 2021 or refinancings thereof are scheduled to mature or become due within 91 days of such date.

Credit Suisse AG, Cayman Islands Branch is the administrative agent.

Community Health is a Franklin, Tenn., hospital company.

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